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What does referral mean in credit card processing?

A referral is a response received on a credit card terminal after a credit card is swiped for authorisation. The response does not mean the credit card has been declined, although the merchant may choose to decline it.

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When a credit card is swiped, the response on the terminal can be: approved, declined, referral, pick up or no match. A referral indicates that the merchant should call the authorisation centre because more information is needed regarding the cardholder.

Other Names

The response on the merchant terminal may also say “Call” or “Call Center,” also indicating that the merchant should call the authorisation centre.

Information Needed

The authorisation centre representative may ask the merchant to check the cardholder’s identification. She may ask to speak to the cardholder directly. In most cases, the authorisation will be approved.

If a Referral is Disregarded

A merchant may choose not to call the authorisation centre and process the transaction. This may subject the merchant to chargeback liability. When a transaction is improperly authorised, and the cardholder fails to pay the credit card, the transaction will be charged back to the merchant.

Other Actions

A merchant may choose to decline the transaction. In this case, the cardholder may present an alternative form of payment.

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About the Author

Sara Huter is a professor of economics. Her background also includes risk management in the banking and energy industries with expertise in credit scores. Huter received an M.B.A. in finance from Texas A&M University and a B.S. in information systems from Kansas State University. She has been writing for over five years with work at Popsyndicate.com, WickedWordSmith.com and Simplejoy.com.

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